15%–20% Growth? The Truth About Victoria’s Hottest Markets
In This Week’s How's The Market | Edition 132
15%–20% Growth? The Truth About Victoria’s Hottest Markets
Bespoke Brilliance Meets Positional Perfection
RBA Interest Rate Update – October 2025
15%–20% Growth? The Truth About Victoria’s Hottest Markets
You've heard the whispers at dinner parties. Your colleague mentioned their cousin bought in Frankston six months ago and the property's already up $120,000. Your Instagram feed is filled with buyer's agents boasting about double-digit growth in regional Victoria. Meanwhile, you're sitting there wondering if you've missed the boat on what might be the hottest property cycle Melbourne has seen in years.
Here's the truth: some Victorian markets have genuinely grown 15-20% in less than twelve months. But the story behind these numbers is far more nuanced than the headline-grabbing percentages suggest.
The Numbers Behind the Hype
When investor buyer's agents Brodie and Joel look at their 2025 purchase data, certain patterns emerge that should make any property watcher sit up and pay attention. Markets like Frankston aren't just performing well, they're experiencing growth rates that rival what Perth achieved during its celebrated boom.
The difference? This time, everyone saw it coming.
Unlike Perth's somewhat unexpected surge, Melbourne's rise has been years in the making. While Brisbane, Perth, and even Adelaide powered ahead, Melbourne remained the "sleeping giant" undervalued, overlooked, and overdue for a correction. Now that correction is happening, and it's happening fast.
Three Markets Moving at Different Speeds
Not all Victorian markets are created equal right now. Understanding which category your target area falls into could be the difference between buying smart and buying into hype.
The Sprinters: Already Up 20%
Frankston leads the pack with growth approaching 20% since February 2025. The northern suburbs aren't far behind. These aren't sleepy beach towns anymore; they're gentrifying rapidly as young families with dual incomes get priced out of inner Melbourne and resettle in more affordable zones.
One telling example: a property inspection that drew 100 people, closed offers the next day, received 35 competing offers, and sold for $70-80k above what experienced buyers thought was already over market value. That's not a market that's a feeding frenzy.
Regional Bendigo is experiencing similar intensity. Buyer's agents who were previously unknown in these areas are now so common that local agents are "sick of them" , a dramatic shift from the start of 2025.
The Steady Climbers: The $500-600k Sweet Spot
Regional Victoria broadly is seeing consistent demand, particularly in the sub-$900k family home market. These areas might not grab headlines with 20% growth figures, but they're steadily appreciating as affordability becomes the primary driver.
The critical factor here: rental demand matters. Some markets like Mernda are seeing buyer's agent saturation without corresponding rental demand, leading to properties sitting vacant for months. Growth without fundamentals is a recipe for disappointment.
The Next Wave: Bordering Suburbs Waiting Their Turn
The smartest investors aren't chasing the current hot spots they're buying in neighboring suburbs before the inevitable spillover effect. As Frankston and similar markets become unaffordable even for the new demographic moving in, where do those buyers go next?
This pattern has played out in every growth cycle throughout Australian property history. The key is identifying these areas before sentiment shifts, not after.
What's Actually Driving This?
Timing Meets Opportunity
The interest rate cuts beginning in February 2025 didn't just reduce borrowing costs; they fundamentally shifted buyer psychology from hesitation to action. Combined with changes to the First Home Buyer Guarantee scheme starting October 1st, you have a perfect storm of accessibility meeting pent-up demand.
Brokers report clients literally lining up, waiting for the scheme changes to take effect so they could enter the market. That's not normal market behavior that's FOMO on a structural level.
The Interstate Factor
Here's something most buyers don't realize: you're not just competing with other Victorians anymore. Eastern states investors who previously poured money into Perth and Brisbane are now redirecting capital to Victorian markets. Combined with local buyer's agents operating across multiple states, competition has intensified dramatically.
Agents in regional markets report receiving calls from buyer's agents they've never heard of, representing clients from Sydney and Queensland. When an agent mentions their surprise at a competing buyer's agent activity, you know something fundamental has shifted.
Stock Scarcity Amplifies Everything
Melbourne is sitting at approximately 16% less stock compared to previous years. Meanwhile, Perth just hit record low stock levels and is experiencing a "second wind" of growth. As equity from appreciating interstate properties gets recycled into Victorian purchases, the pressure only increases.
The Christmas Countdown Factor
Right now, buyers wanting to settle before Christmas have roughly four weeks left. This artificial deadline created by conveyancer availability and end-of-year shutdowns is pushing already-frenzied buyers into making hasty decisions.
Time pressure plus low stock plus emotional buyers equals the exact conditions where prices detach from fundamentals. If you're buying purely to "get in before Christmas," you're probably overpaying.
How to Navigate Without Overpaying
Know Your Competition
Under $1 million in metro Melbourne and most regional areas, expect to compete primarily with interstate buyer's agents representing investors. In the $700-900k range, you'll face more owner-occupiers but still significant buyer's agent activity.
This matters because it changes your strategy. Investors are generally more disciplined with numbers. Owner-occupiers will pay for emotion. Understanding who you're bidding against helps you predict their ceiling.
Don't Chase the Headlines
If you're hearing about 20% growth, you're already late. The smart money is identifying neighboring suburbs to current hot spots areas with similar fundamentals but without the same sentiment-driven pricing.
Look for markets where owner-occupiers will naturally migrate as current hot spots become unaffordable. These spillover suburbs often provide stronger growth over the next 12-24 months than trying to squeeze into an already overheated market.
Understand Affordability Layers
Affordability isn't just about current prices versus current local incomes. The critical question is: who is moving into the area, and what do they earn?
Gentrification changes affordability calculations completely. If young professionals earning $150k household income are moving from inner Melbourne to Frankston, suddenly properties at $800k aren't "expensive" they're bargains compared to the $1.2 million they couldn't afford closer to the city.
Focus on Fundamentals Over FOMO
Markets driven purely by investor sentiment without underlying rental demand will eventually correct. Before buying, ask:
What are the vacancy rates?
How long are rentals sitting on the market?
Is there genuine owner-occupier demand or just investor speculation?
What are the actual days on market, not just listing prices?
Perth grew 100% over three to four years. Jumping in now would be questionable. The Victorian markets showing 20% growth in under a year might have more room, but only in locations with genuine demand drivers.
What Comes Next?
The consensus among those watching Victorian markets closely: this is still the beginning. The combination of rate cuts, policy changes, interstate investor attention, and years of underperformance relative to other capitals suggests Melbourne's growth cycle has a runway.
But "the beginning" doesn't mean buy anything anywhere. Markets are moving at dramatically different speeds. The gap between the best and worst performing suburbs in this cycle will be enormous.
The Bottom Line
Yes, some Victorian markets have genuinely achieved 15-20% growth in less than a year. Yes, there are legitimate opportunities remaining. But the ease of those opportunities has passed.
The buyers crushing it right now aren't following the crowd into Frankston at premium prices. They're analyzing bordering suburbs, understanding demographic flows, and positioning ahead of sentiment rather than chasing it.
They're also brutally honest about rental demand, vacancy rates, and whether growth is driven by fundamentals or just buyer's agent hype echoing through Instagram feeds.
The Victorian property boom is real. The question isn't whether growth is happening—it's whether you're buying the right property, in the right location, at the right price, for the right reasons.
Everything else is just expensive noise.
Stay ahead of the market - get the real auction results every week!
What The Agents Are Saying
The shift on the ground is stark. Regional agents who'd never heard of buyer's agents at the start of 2025 are now fielding multiple calls daily from strangers demanding off-market properties. One Bendigo agent put it bluntly: "We didn't know what a buyer's agent was before this year. Now we're sick of them."
In metro Melbourne, agents report similar patterns across price points, phones ringing with interstate buyer's agents representing Sydney and Queensland investors, all chasing the same limited stock. Even experienced agents are caught off guard by final sale prices, watching properties clear $200-300k above their estimates because market sentiment is moving faster than comparable sales data can track.
The universal message from agents across all price points: if you're waiting for auction day in a hot pocket, you've already lost. The deals are happening before properties hit the market, with buyers who've built relationships and positioned themselves as the obvious choice before competition even knows the property exists.
The Wow Factor!
27-29 Wrights Terrace, Prahran, Vic 3181
Bespoke Brilliance Meets Positional Perfection
Why it WOWs:
Brand-new designer home with architectural flair
Double-width facade with timber & brick details
Front lounge/dining with steel doors & marble bar
Chef’s kitchen with marble island & Miele appliances
Private north-facing backyard with heated Bisazza pool & BBQ point
Three bedrooms, main ensuite, chic central bathroom
Soaring 4.2m ceilings & full-height windows with city views
Smart-home automation, security cameras & EV charging garage
Luxury finishes: Venetian plaster, brass, marble, timber & wool carpets
Steps to Chapel St, Hawksburn Village, trams, trains & schools
Price guide : $4,675,000-$5,075,000
In The Media
RBA Interest Rate Update – October 2025
The Reserve Bank of Australia (RBA) has held the cash rate steady at 3.60%, citing ongoing uncertainty around inflation and economic growth. Governor Michele Bullock noted that while headline prices have risen permanently, the bank remains cautious and data-driven ahead of the next decision.
Economists suggest a rate cut is now unlikely until November, pending the September quarter inflation data. NAB has pushed back its forecast for further cuts until 2026, while ANZ, CBA, and Westpac maintain varying expectations for a potential reduction later this year.
Rising home prices continue to challenge affordability, with the national median now at $835,000 up 5.3% over the past year. For borrowers, the hold provides no immediate relief, but the property market is expected to remain stable in the short term.
The RBA will announce its next interest rate decision on 4 November 2025.
Final Thoughts
The 20% growth isn't a myth, it's just not evenly distributed. While everyone's chasing yesterday's winners, the real money is being made by those buying tomorrow's hot spots at today's prices.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
